Helaba to sell 'troublesome' subsidiary Hannover Leasing

Thomas Gross - Helaba

According to Thomas Gross, deputy board chairman at Helaba and board member at Hannover Leasing, "We will find a strong partner for Hannover Leasing which will provide the company with good prospects for its institutional business and which enables it to carry on the responsibility of its existing funds. The timing is good for a sale, given the ongoing strength of the property markets."

There has been speculation for at least the last couple of years that the Frankfurt-based Helaba was looking to unload its property fund manager subsidiary Hannover Leasing. Now those plans are concrete, with Helaba announcing that it plans to sell its minority stake in the fund manager by the middle of next year at the latest.

Announcing its decision, Helaba says the market for closed-end funds has fundamentally changed in the past few years, with demand from retail customers in the doldrums. Together with the intensified regulatory regime for funds, the business is no longer core to Helaba's activities, the bank said.

Helaba owns 49.34% of Hannover Leasing, while sister company Hessisch-Thüringische Sparkassen-Beteiligungsgesellschaft (HTSB) with 48.0% is also readying its stake for sale. The remainder belongs to a previous manager of the group, Friedrich Wilhelm Patt. Helaba has been a shareholder in the company since 1996.

According to Thomas Gross, deputy board chairman at Helaba and board member at Hannover Leasing, "We will find a strong partner for Hannover Leasing which will provide the company with good prospects for its institutional business and which enables it to carry on the responsibility of its existing funds. The timing is good for a sale, given the ongoing strength of the property markets."

Hannover Leasing has gone through several top management changes recently, culminating in the departure after only 18 months of Bernhard Berg, who moved earlier this summer to become board chairman at Corpus Sireo. Berg had arrived from IVG Institutional Funds, after stints at Aareal Bank and Generali Deutschland.

Several other top managers also left the company rather suddenly over the last five years, fuelling speculation about a lack of a clear mission at the top. The business is currently being run by company veteran Marcus Menne and Michael Ruhl, who joined the company three years ago from DFH Deutsche Fonds Holding AG.

Internally the group has undergone major restructuring, cutting costs and boosting its fund platform and competitivenesss to extend its product range. More than half of its €14bn of assets under management is in real estate, with the rest in aircraft and infrastructure leasing.

Helaba CEO Herbert Hans Grüntker said a year ago when he took over the top job that Helaba was determined to concentrate on its core business. The complexity of the structure at Hannover Leasing (with hundreds of subsidiary companies) was clearly something Grüntker did not wish to get more deeply involved in, together with Hannover Leasing's disappointing results after the collapse of much of its very specialised business during the financial crisis.

Hannover Leasing is based in Pullach near Munich and employs 170 staff, well below its peak of 300 in 2009. Its various funds have nearly 70,000 investors, more than half in real estate funds. Interested candidates to buy the group – and there are said to be a number - will have to put in serious due diligence to untangle the myriad of interwoven fund structures to arrive at a fair valuation for the group.